In Colorado, New Year Brings Major New Employment Laws Online

Fox Rothschild LLP

Fox Rothschild LLP

As we wind down a particularly challenging 2020, businesses in Colorado must also prepare for a few significant changes in the state's employment laws and regulations set to take effect on January 1, 2021.

Promotions, job postings, sick leave and vacation time are all directly impacted by these new laws, and some provisions will be triggered immediately due to the ongoing COVID-19 pandemic.

To ensure that your organization is poised for success in 2021, it is essential to be familiar with the scope and requirements of these new statutes and regulations, as well as any changes needed in your company's existing policies and practices.

Healthy Families and Workplaces Act

Colorado has a new paid leave law – the Healthy Families and Workplaces Act (HFWA) – that takes effect on January 1, 2021 and requires most employers to provide paid leave to nearly all employees (even part time employees).

There are a few exemptions. Employers with 15 or fewer employees are exempt until January 1, 2022. An employer that provides equivalent or more paid leave under a collective bargaining agreement is exempt. The federal government and employees covered by the federal Railroad Unemployment Insurance Act are also not covered by the HFWA.

Under the HFWA, employees are entitled to accrue paid sick leave in the amount of one hour for every 30 hours worked, up to a cap of 48 hours per benefit year. However, on the day a public health emergency (PHE) is declared, employers are required to supplement the number of hours accrued to bring employees up to the following paid sick leave allotments immediately:

(1) for employees who normally work 40 or more hours in a week, at least 80 hours; or

(2) for employees who normally work fewer than 40 hours in a week, at least the greater of either the number of hours the employee (a) is scheduled for work or paid leave in the upcoming 14-day period, or (b) actually worked on average in the 14-day period prior to the declaration of the PHE. PTO/vacation policies can satisfy the HFWA requirements, but we recommend certain revisions to ensure compliance.

One of the biggest issues with the HFWA is that employers need to supplement the PTO/vacation bank on the day a PHE is declared. Because COVID-19 is an active pandemic, this supplement requirement will apply on January 1, 2021. The PHE supplement applies even if an employee has used all of his/her PTO/vacation for other reasons. PTO/vacation policies should be revised to address the PHE supplement issue as well as other requirements of the HFWA.

We are prepared to assist our clients in reviewing any PTO/vacation policies and/or drafting a new policy to ensure compliance with the HFWA. Further, please note that employers must display or provide a poster informing all employees and workers of their rights under the HFWA and must provide a written notice of the same to each employee.

Equal Pay

Colorado also has a new equal pay law – the Equal Pay for Equal Work Act (EPEWA) – that is accompanied by corresponding Equal Pay Transparency Rules (EPT Rules), all of which go into effect on January 1, 2021.

The EPEWA expands on the existing prohibition against sex-based pay discrimination and imposes new requirements for disclosures in job postings and internal promotion announcements. The EPT Rules promulgated under the EPEWA provide detail regarding employer requirements to make disclosures in job postings and promotion announcements.

Even if your company’s policies currently include prohibitions on pay discrimination, those policies should be reviewed to ensure compliance with the new details of the EPEWA. Employers also should consider conducting a pay equity audit of their workforce with a goal of identifying and remedying pay disparities, which will aid in achieving compliance and may provide a defense in pay equity litigation, generally for a two-year period from the date of the audit.

The EPEWA and corresponding EPT Rules also impose some of the most stringent requirements in the country with regard to pay transparency. All job postings must include disclosure of compensation (or a range thereof) and a description of benefits offered.

All opportunities for promotion must be announced to current employees and include the compensation and benefits disclosures. Determining which employees must receive the promotion announcements is especially tricky for organizations with employees within and outside of Colorado, remote work positions, or both.


Finally, employers should note the minimum wage changes that take effect in the new year.

With the issuance of a Colorado Overtime and Minimum Pay Standards Order #37, Colorado’s minimum wage has increased to $12.32 ($9.30 for tipped employees). Other changes in the COMPS Order include revisions to the transportation worker exemption, the administrative employee exemption and the professional employee exemption (to add creative professionals).

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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